Posts tagged the economist.
You could play the bubble, because it might not be over yet, but I wouldn’t put money in Apple stockA Yale economist reflects on Apple’s astonishing share price, which has risen by 83% in the past year, and by almost 50% so far in 2012. Apple is an iconic brand—now it is a totemic investment, too. (via theeconomist)
“Fishermen generally understand the risks of overfishing. Yet still they flout quotas, where they exist. That is often because they take a short-term view of the asset—they would rather cash in now and invest the money in something else. And it is invariably compounded by a commons-despoiling feeling that if they don’t plunder, others will.
In most fisheries, the fishermen would make more money by husbanding their resource, and it should be possible to incentivise them to do so. The best way is to give them a defined, long-term right to a share of the fish. In regulated industrial fisheries, as in Iceland, New Zealand and America, this has taken the form of a tradable, individual share of a fishing quota. Developing countries, where law enforcement is weak, seem to do better when a group right over an expanse of water is given to a co-operative or village fleet. The principle is the same: fishermen who feel like owners are more likely to behave as responsible stewards. The new statistical study confirms that rights-based fisheries are generally healthier.”
Read more about rights-based fishing at The Economist
“I find myself thinking about these things in particular with respect to climate change. Not long ago, Karl Smith at Modeled Behavior wrote a post arguing that global warming would likely have a number of nasty consequences, but that humanity’s best policy response is to plow forward in pursuit of economic growth, including through the aggressive development of fossil fuel sources. It was not especially well received in some quarters; it got him labeled “sociopathic” on Twitter. Is his a ridiculous view? I think then about a recent post written by a colleague at Democracy in America, who ruminates on the world’s failure to address climate change and says:
Maybe a hundred years down the line, nobody will look back at climate change as the most important issue of the early 21st century, because the damage will have been done, and the idea that it might have been prevented will seem absurd. Maybe the idea that Mali and Burkina Faso were once inhabited countries rather than empty deserts will seem queer, and the immiseration of huge numbers of stateless refugees thronging against the borders of the rich northern countries will be taken for granted. The absence of the polar ice cap and the submersion of Venice will have been normalised; nobody will think of these as live issues, no one will spend their time reproaching their forefathers, there’ll be no moral dimension at all. We will have wrecked the planet, but our great-grandchildren won’t care much, because they’ll have been born into a planet already wrecked.
My colleague presents this as a depressing possibility, and indeed it would seem to be so. But turn again to those living 100 or 500 years ago. How would they have viewed civilisation today? Think of all the animals, languages, and societies that have since gone extinct. Modern lives might seem like a vision of hell. The coastal, urban corridor along which I live now is horribly changed from its condition a century ago. Those of us who live along it spend the vast majority of our time indoors and only rarely glimpse anything that could honestly be called nature. The food we eat is highly processed and often unidentifiable as one plant or animal versus another. Many of us rarely see many of our close friends and family, and communicate with them only through the tinny interfaces of our electronic devices. “Some life!”, a resident of the past might conclude. Yet how many of us would switch places with those who lived centuries ago? A century from now, much more of the world will likely have been despoiled. Humans might live in underground bunkers eating lab-grown meat. But who’s to say they won’t prefer their lot to ours?
The preferences of future generations will necessarily reflect the world in which they find themselves; they cannot be compared to our own, anymore than the preferences of those living in 1700 would have meaning in today’s world. What matters is the welfare of future generations. Preserving the earth as it is isn’t a worthy goal; preserving growth in living standards is.
What might lurk on the other side of the dark curtain that prevents us from seeing more than a few years out? One possibility is that growth will continue, at a pace fast enough to ensure that however degraded the environment our descendents are better off than we are. There are three more worrying potential dynamics, however. One is that the growth rates of the past century are no longer sustainable, climate change or no. That would be very bad news; a world in which the pie is no longer getting larger is one in which countries can only have more at the expense of others. Conflict would be rampant in such a world. The good news is that this seems like an unlikely outcome. So long as the march of technological progress continues, humanity should continue to find ways to do more with less.
A second possibility is that growth will continue, but the costs of climate change will be sufficiently large to offset any gains. And a third is that growth will or won’t continue, but it won’t matter because the impact of climate change will be sufficiently large to render the planet uninhabitable to humans (or incompatible with life as we know it, at any rate).
If one believes that it’s nearly useless to project more than a decade out, then it seems wisest to proceed from an insurance standpoint. It makes little sense to try and work out projected growth rates decades ahead, compute a social cost of carbon, apply standard discounting and put together a plan which attempts to maximise welfare for all generations, including the present one. It’s absurd to do so. We can run the exercises in order to help us think through the issues, but there’s little use in pretending that there’s much more to it. Instead, one might argue, there are two thing which should take priority. First, it seems likely that in any set of conditions, the richest society will be best suited to adapt. As such, policy should be tailored around maximising medium-term growth potential. And second, society must aim to avoid scenarios to which it is fundamentally unable to adapt.
Translating these principles into action in the present, on matters involving real trade-offs, is no picnic. Oddly enough, a change in the way one looks at the long run doesn’t necessarily change assessments of many specific policy proposals. Countries should try to boost growth. It’s a good idea to price externalities and support broad-based research, and it’s probably a good idea to also continue developing fossil fuel assets—the wealth such development generates enhances our ability to invest now and consume later. What seems clear from this perspective, however, is that America’s present policy stance is really, really bad. If future wealth is the most important thing, then it makes little sense to borrow heavily from the future for current consumption. Insuring against catastrophe means trying to boost future wealth, and that means that if you’re going to borrow, it’s important to channel that borrowing into investment. The good thing current consumers get as compensation is the ability to burn away cheap fossil fuels. If disaster prevention is the key, by contrast, then consumers can borrow now for the purpose of consumption, but they must compensate the future by facing strict limits on carbon emissions.
Instead, America is consuming more than it can afford now, leaving the future less rich, while also pouring carbon into the atmosphere. That strategy only makes sense if destruction is already a foregone conclusion—if there will be no future to pay off the debt. Why should the world behave this way? I suppose one possibility is that there is less of a future for the median voter. Over the past 30 years, the age of the median American has risen from around 30 to near 40. The age of the median voter is higher still, and rising.
Ultimately, the first step toward addressing future ills is to behave as if there will, in fact, be a future…”
Read the rest at The Economist
We will have wrecked the planet, but our great-grandchildren won’t care much, because they’ll have been born into a planet already wrecked.The Economist, eviscerating the U.S. and others for not acting in the Durban COP17 climate talks.
Daily chart: climate change. A new measure of global warming, intended partly to address the concerns of “legitimate sceptics”, offers fresh evidence that the world is warming fast.
The Economist says pretty much what I did the other day, just more eloquently:
“Many of these aggrieved youth believe that the government has become unresponsive, that their voices have been silenced, and therefore protest is the only option. But this strikes me as a fundamental misreading of the past three years. It is likely that few of the protesters have actually taken part in the more mundane aspects of the system they’d like to take down—for example, only 24% of 18- to 29-year-olds voted in the 2010 mid-term elections. And while they were quietly seething, the tea-party movement was showing America what democracy actually looks like, pushing their candidates forward and holding them accountable. When liberals complain that the Republicans are beholden to the tea-party movement, is that not an admission that the system is responsive?
Which is not to say that it is working perfectly. There is no doubt that some of what we are hearing out of the Wall Street encampment is correct, and there have been good suggestions as to how to translate these sentiments into action. But perhaps the biggest reason young people feel so alienated by their government is because they have removed themselves from the process of choosing it. Tea-party people have been known to take over public spaces, too. Then they go vote.”
“This only bolsters my case for the need to engage in the process. I want the enviro-left to engage in the process of making laws. I want to read your letters to your representatives. I want photos of you speaking out at townhall meetings. I want to see how you found out that a permit to build a road in a protected forest was flawed.
So, make fun of me all you want when I argue that environmentalists don’t know about their options to shape policy. Snark and bark at me all you like when I show that disengagement from lawmaking is not only a very serious problem, it’s the cause of modern day problems. Condescend to your wits-end when I argue that people can’t change a system that they don’t understand. Call me names when I point out that protesters won’t be taken seriously because they’ve been demonstrably too lazy to engage in the actual process of making said policies.
I further argue that enviro-left organizations are partially to blame for this engagement deficit. Their methods are, generally, reactionary. E.g., it’s a series of short-term action campaigns that start with “Sign this petition of the month” followed by lots of exclamation points and a “donate” button. No mention of how the law came to be. No mention of when or how or why Congress reviewed said laws in the first place. No mention of the Federal Register or committee debates or how to find out about the public comment period.”
The Economist asks: Should the Keystone XL pipeline be approved?
Follow up to my previous post: Starvation returns to the Horn of Africa, extreme drought, high food prices, rape. The Economist and Al Jazeera are vigilantly covering the devastating drought in east Africa - the worst since the 1960s effecting Somalia, Kenya, Ethiopia, and Djibouti. Aid groups can’t get in sufficiently to provide food, water, and shelter. Refugee camps, it seems, are run by militant rebel groups.
Some rebel groups have cut deals with al-Qaeda affiliate al-Shabaab to allow starving refugees cross borders.
The U.S. State Department has issued a strongly worded letter to al-Shabaab to allow foreign aid into Somalia. Update below
Who is to blame? An oscillation in the climate in the form of La Niña—a cooling of the surface temperature across the equatorial eastern-central Pacific, causing big changes in airflow and weather patterns—is likely to have contributed to the droughts.
But humans too play a part. “This is a preventable disaster and solutions are possible,” says Jane Cocking, Oxfam’s humanitarian director. It is no coincidence that the worst-affected areas are also the poorest in the region. Long-term investment could have made villages and towns more resilient.
Update: US Dept. of State sending food aid.
This week, USAID activated a disaster assistance response team (DART) operating out of Ethiopia and Kenya to work with the World Food Program, UNICEF, and over a dozen other organizations to coordinate emergency efforts to relieve the crisis. So far this year, the United States has provided more than $366 million to respond to the drought in the Horn of Africa, and continues to explore additional ways to assist those in need.
Read the Press release, here.
“Humans make nature.” That’s how biologist Erle Ellis defines the Anthropocene in this interview with The Economist. The article, Welcome to the Anthropocene, is getting a lot of buzz.
An interesting legal question bubbles up to the mainstream press: What is the legal status of a country, and its citizens, if it sinks under water? We discussed this at Vermont Law and the COP15. And, since I’m into land use, I think about property rights much too much. The Economist puts it plain,
So the legal implications of sinking islands are preoccupying environmental lawyers. Can there be such a thing as a submarine state? According to one definition, a state needs a clear territory, a permanent population and the ability to deal with other states. From a league or so under the sea, that sounds hard.
A submarine state is interesting to think about, too. No state or country can own the ocean floor (well, technically they can’t beyond 200 miles oceanward from the coastline, but that doesn’t really apply here). A submarine would be landless but not borderless. Whether that submarine state (or eg floating island) can be classified as a defensible “territory” is a mystery. Intriguing, yes? Clicky click the link
Hop, hop, hop, plop. What’s to be done about sinking states? As sea levels rise, lawyers ask how submerged islands can keep hold of their statehood.
“America, despite its wealth and strength, often seems to be falling apart.” The Economist nails it, showing that a major drag on the US economic outlook is poor condition of our infrastructure, placing blame on the politicians who are an, “embarrassment” “puzzling” “stingy” “calamitous” “inadequate.”
American cities have suffered a rash of recent infrastructure calamities, from the failure of the New Orleans levees to the collapse of a highway bridge in Minneapolis, to a fatal crash on Washington, DC’s (generally impressive) metro system. But just as striking are the common shortcomings. America’s civil engineers routinely give its transport structures poor marks, rating roads, rails and bridges as deficient or functionally obsolete. And according to a World Economic Forum study America’s infrastructure has got worse, by comparison with other countries, over the past decade. In the WEF 2010 league table America now ranks 23rd for overall infrastructure quality, between Spain and Chile. Its roads, railways, ports and air-transport infrastructure are all judged mediocre against networks in northern Europe.
Can’t wait to read this issue. Looks like two cover articles in this edition, the one below and this one here.
Tomorrow’s cover today: Humans have changed the way the world works. Now they have to change the way they think about it, too